Good News: The SALT Deduction Is Getting Bigger (At Least for a Little While!)
If you’ve been annoyed by that $10,000 limit on deducting your state and local taxes—trust me, you’re not the only one. For years, tons of people haven’t been able to itemize because that cap made the math totally not worth it. But now? There’s finally a change that might put itemizing back on the table.
The SALT Cap Just Got a Serious Boost
Starting in 2025, the SALT deduction jumps from $10,000 to $40,000. Yep—quadrupled. And it’ll keep inching up a little each year until 2029, before going back to $10,000 in 2030.
Why does this matter? Because it means a LOT of people who’ve been stuck taking the standard deduction might actually get to itemize again. If your property taxes or state income taxes are already high—or even close to that old $10k cap—you may finally get a break that actually feels like a break.
A Quick Heads-Up for Higher Incomes
If your income is over $500,000, your SALT cap starts to shrink a bit (it phases down). But even then, it can never drop below the original $10,000. So nobody’s losing anything—they’re just not getting the full boost.
For most folks, though? This is pretty much all upside.
A Win for Small Business Owners Too
There’s also a behind-the-scenes victory here. Many business owners use something called PTETs (pass-through entity taxes) to get around the SALT cap. Some earlier versions of the bill tried to limit that…but the final version did not.
So if you’re an S-Corp or partnership owner using PTET—good news—you can keep doing exactly what you’ve been doing.
So What Does This Mean for You?
Here’s the simple version:
- If you’ve been taking the standard deduction because itemizing hasn’t made sense, 2025 might change that.
- Homeowners with higher property taxes are especially likely to benefit.
- Business owners get to keep using the PTET workaround.
- And overall, more people will get access to deductions they’ve been locked out of for years.
We’ve got some time before any of this kicks in, but it’s worth keeping on your radar. And if you want to run the numbers to see whether itemizing will make sense for you once the new cap starts, I’m here anytime.